The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing strategies.
On Tuesday, the FTC issued information requests to eight companies spanning various industries, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency seeks to understand how these pricing practices impact privacy, competition, and consumer protection.
These companies utilize data-driven techniques, known as “surveillance pricing” or “dynamic pricing,” to present different prices to consumers based on their characteristics or behaviors. Such factors can include a customer’s location, demographic details, credit history, and online shopping behavior.
Many of the firms under investigation provide transaction, sales, and pricing services to prominent U.S. and global businesses. For instance, Task Software manages transactions for major hospitality chains, including McDonald’s and Starbucks. Revionics offers retail price optimization and analytics services to large companies like Home Depot. Pros, a software company specializing in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to clarify the workings of this opaque market that categorizes consumers and assigns targeted pricing to products and services. FTC Chair Lina Khan commented that companies leveraging consumers’ personal data pose a threat to privacy and may be using this information to impose higher prices. She emphasized the importance of transparency in how businesses utilize consumer data for surveillance pricing strategies.
The FTC’s inquiry will focus on four main areas: the range of surveillance pricing products and services each company offers; the methods of data collection; relevant customer and sales information; and the influence of these practices on the pricing consumers ultimately face.